FCC to Consider First Step Toward Broadband Regulation

The U.S. Federal Communications Commission is scheduled to vote on the first step toward reclassifying broadband as a regulated, common-carrier service, despite objections from many U.S. lawmakers and broadband providers.

The FCC, in a Thursday morning meeting, is scheduled to vote on a notice of inquiry on new legal frameworks for enforcing network neutrality rules, redirecting telephone subsidies to broadband and implementing other parts of the agency's national broadband plan. In a notice of inquiry, or NOI, the FCC seeks public comment on a topic. NOIs often lead to FCC rulemaking proceedings.

The NOI follows a U.S. appeals court decision in April saying the FCC did not have the authority to enforce informal net neutrality rules in a case involving Comcast's throttling of some peer-to-peer traffic. FCC Chairman Julius Genachowski has suggested that the appeals court ruling means the FCC has little authority to regulate broadband, and reclassifying broadband from a largely unregulated information service to a regulated common-carrier service would restore some of the agency's authority.

Under Genachowski's plan, the FCC would forbear from applying most of the common-carrier regulations under Title II of the Telecommunications Act to broadband. The main goals would be to create net neutrality rules prohibiting broadband providers from selectively blocking Web content, to reform the Universal Service Fund that now subsidizes telephone service in poor and rural areas and to require broadband providers to give customers more information about the speeds and quality of service they receive, Genachowski has said.

Genachowski's reclassification proposal has generated heated debate, however. Some broadband providers and free-market advocates have suggested that new regulations could slow broadband providers' investments and hurt the FCC's goal of bringing broadband to all of the U.S.

In a paper released Wednesday, Charles Davidson, director of the Advanced Communications Law & Policy Institute at New York Law School, and Bret Swanson, president of technology research firm Entropy Economics, argued that net neutrality rules could cost hundreds of thousands of jobs in the U.S. A 10 percent reduction in investment by broadband providers would cost more than 500,000 U.S. jobs before 2015, they wrote.

"With the U.S. economy still in a fragile state, imposing restrictive regulation on one of the country's most dynamic sectors is misguided," Davidson said in a statement. "At a time when policymakers should be doing everything they can to spur job creation, these rules just do not make sense. On the other hand, many experts foresee continued investment and job growth across the industry in the absence of such regulatory constraints."

Broadband use in the U.S. has grown significantly in recent years because of a lack of regulations, critics said.

"Reclassification ... increases the regulator's ability to expose Internet service providers to extensive regulations ill-suited to broadband," wrote George Ford and Lawrence Spiwak in a paper published this month by the free-market focused think tank the Phoenix Center for Advanced Legal & Economic Public Policy Studies.

Even if the FCC decides against applying many of the common-carrier regulations to broadband, future commissions could grab more regulatory authority, Ford and Spiwak said. "The chairman is seeking the unhindered authority to impose heavy-handed regulation, but promises not to do so," they wrote. "While the commission may have convinced itself that it has such discipline, it recognizes that it cannot pre-commit to long-term moderation."

Several consumer and digital rights groups, however, have supported Genachowski's proposal to reclassify broadband.

Without new legal authority much of the FCC's national broadband plan, which is focused on bringing broadband to all U.S. residents, is in doubt, said Aparna Sridhar, policy counsel for Free Press, a media reform group.

"Tomorrow's FCC action begins a process of open discussion about how to achieve our nation's broadband goals in a legally sustainable way," she said. "Based on their overheated rhetoric, the phone and cable companies would seem to prefer to keep the broken legal framework adopted by the [President] Bush-era FCC rather than consider whether better, sounder options exist. Objecting to merely asking these questions is absurd."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant's e-mail address is grant_gross@idg.com.